“Taxable
Service” means any service provided or to be provided to any person, by an
architect in his professional capacity, in any manner;

[Section 65 (105) (p) of Finance
Act, 1994 as amended]

"Architect" means any person whose name is, for the time
being, entered in the register of architects maintained under section 23 of the
Architect Act,1972 (20 of 1972) and also includes any commercial concern
engaged in any manner, whether directly or indirectly, in rendering services in
the field of architecture;

[Section 65(6) of Finance Act, 1994 as
amended]

(C)Rate of Tax & Accounting Code:

Rate of Tax

Accounting Code

Service Tax

10% of the value of
services

00440072

Education Cess

2% of the service tax payable

00440298

Secondary and Higher Education cess

1% of the service tax payable.

00440426

Other –Penalty/interest

As levied or applicable

00440073

( Rate of tax is
effective from 24.02.2009.)

(D)Classification of Taxable Services:

(1)The
classification of taxable services shall be determined according to the terms
of the sub-clauses (105) of section 65;

(2)When for any reason , a taxable service is
prima facie, classifiable under twoor
more sub-clauses of clause (105) of section 65, classification shall beeffected as follows :-

(a) the sub-clause which provides the most specific description
shall be preferred to sub-clauses providing a more general description;

(b) composite
services consisting of a combination of different services which cannot be
classified in the manner specified in clause (a), shall be classified as if
they consisted of a service which gives them their essential character, in so
far as this criterion is applicable;

(c) when a service cannot be classified in the manner specified
in clause (a) or clause (b), it shall be classified under the sub-clause which
occurs first among the sub-clauses which equally merits consideration.

( Sec.65A of
Finance Act,1994)

(E)
Valuation of taxable services for charging Service tax

(1)Service tax chargeable on any taxable service
with reference to its value shall,—

(i)
in a case where the provision of
service is for a consideration in money, be the gross amount charged by the
service provider for such service provided or to be provided by him;

(ii) in a case where the provision of service is
for a consideration not wholly or partly consisting of money, be such amount in
money, with the addition of service tax charged, is equivalent to the consideration;

(iii) in a case where the
provision of service is for a consideration which is not ascertainable, be the
amount as may be determined in the prescribed manner.

(2) Where the gross
amount charged by a service provider, for the service provided or to be
provided is inclusive of service tax payable, the value of such taxable service
shall be such amount as, with the addition of tax payable, is equal to the
gross amount charged.

(3) The gross amount
charged for the taxable service shall include any amount received towards the
taxable service before, during or after provision of such service.

(4) Subject to the
provisions of sub-sections (1), (2) and (3), the value shall be determined in
such manner as may be prescribed.

Explanation.—For the purposes of this section,—

(a) “consideration” includes any amount that is payable for the
taxable services provided or to be provided;

(b) “money” includes
any currency, cheque, promissory note, letter of
credit, draft, pay order, travellerscheque, money order, postal remittance and other similar
instruments but does not include currency that is held for its numismatic
value;

(c) “gross amount
charged” includes payment by cheque, credit card,
deduction from account and any form of payment by issue of credit notes or
debit notes and ‘book adjustment, and any amount credited or debited, as the
case may be, to any account, whether called “Suspense account” or by any other
name, in the books of account of a person liable to pay service tax, where the
transaction of taxable service is with any associated enterprise.

( Sec.67
of Finance Act,1994)

Inclusion
in or Exclusion from value of certain expenditure or cost:

(1)Where any expenditure or costs are
incurred by the service provider in the course of providing taxable service,
all such expenditure or costs shall be treated as consideration for the taxable
service provided or to be provided and shall be included in the value for the
purpose of charging service tax on the said service.

[Rule 5(1) of Service
Tax (Determination of Value) Rules,2006)]

(2)The
expenditure or costs incurred by the service provider as a pure agent of the
recipient of service, shall be excluded from the value of the taxable
service if all the following conditions are satisfied, namely:-

(i) the service provider acts as a pure agent of the recipient
of service when he makes payment to third party for the goods or services
procured;

(ii) the recipient of service receives and uses the goods or
services so procured by the service provider in his capacity as pure
agent of the recipient of service;

(iii) the recipient of service is liable to make payment to the
third party;

(iv) the recipient of service authorizes the service provider to
make payment on his behalf;

(v) the recipient of service knows that the goods and services
for which payment has been made by the service provider shall be provided
by the third party;

(vi) the payment made by the service provider on behalf of the
recipient of service has been separately indicated in the invoice issued by the
service provider to the recipient of service;

(vii) the
service provider recovers from the recipient of service only such amount as has
been paid by him to the third party; and

(viii)the goods or services procured by the service
provider from the third party as a pure agent of the recipient of service are
in addition to the services he provides on his own account.

[Rule 5(2) of Service Tax
(Determination of Value) Rules,2006)]

(F)Clarifications issued by the Board /Ministry :

Scope of Architect’s Services. – (1) Under Section
65 of the Finance Act, 1994 an “architect” has been defined to mean any person
whose name is, for the time being, entered in the register of architects
maintained under Section 23 of the Architects Act, 1972 and also includes any
commercial concern engaged in any manner, whether directly or indirectly, in
rendering services in the field of architecture.The nature and scope of the services rendered
by architects are well delineated under the provisions of the Architects Act.

(2)Broadly, the work of an architect starts from
providing appropriate advice keeping in view the requirements of the client at
the preliminary stage of initial sketches, specifications and drawing of plans,
and consists of providing detailed drawings, approval of the drawings from the
concerned authorities, supervision at each stage of construction and till the
point when the completion certificate is obtained from the authorities.

(3)The services rendered by an architect are of
a very diverse nature and are spread over a fairly long period of time. At the
time when an architect is actually engaged for a particular project, letters
(contract is exchanged for the same between the architect and the person
engaging him.The contract / agreement details the entire scope of the services to be rendered by
the architect, including the terms and conditions of employment and the payment
schedule for the service rendered by the architect.The “taxable service” means any service provided
to a client by the architect in his professional capacity in any manner.

( Vide M.F.( D.R.)Letter No. 11/3/98-TRU dated 07.10.1998 )

(G)Exemption & Exclusion:

1.
Exemption to Small Scale Service Providers:

In exercise of the
powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32
of 1994) (hereinafter referred to as the said Finance Act), the Central
Government, on being satisfied that it is necessary in the public interest so
to do, hereby exempts taxable services of aggregate value not exceeding Ten lakh*
rupees in any financial year from the whole of the service tax leviable thereon under section 66 of the said Finance Act:

Provided
that nothing contained in this notification shall apply to,-

(i) taxable services
provided by a person under a brand name or trade name, whether registered or
not, of another person; or

(ii) such value of taxable services in respect of which service
tax shall be paid by such person and in such manner as specified under
sub-section (2) of section 68 of the said Finance Act read with Service Tax
Rules,1994.

2.
The exemption contained in this notification shall apply subject to the
following conditions, namely:-

(i)the
provider of taxable service has the option not to avail the exemption contained
in this notification and pay service tax on the taxable services provided by
him and such option, once exercised in a financial year, shall not be withdrawn
during the remaining part of such financial year;

(ii)the
provider of taxable service shall not avail the CENVAT credit of service tax
paid on any input services, under rule 3 or rule 13 of the CENVAT Credit Rules,
2004 (herein after referred to as the said rules), used for providing the said
taxable service, for which exemption from payment of service tax under this
notification is availed of;

(iii)the
provider of taxable service shall not avail the CENVAT credit under rule 3 of
the said rules, on capital goods received in the premises of provider of such
taxable service during the period in which the service provider avails
exemption from payment of service tax under this notification;

(iv)the
provider of taxable service shall avail the CENVAT credit only on such inputs
or input services received, on or after the date on which the service provider
starts paying service tax, and used for the provision of taxable services for
which service tax is payable;

(v)the
provider of taxable service who starts availing exemption under this
notification shall be required to pay an amount equivalent to the CENVAT credit
taken by him, if any, in respect of such inputs lying in stock or in process on
the date on which the provider of taxable service starts availing exemption
under this notification;

(vi)the
balance of CENVAT credit lying unutilised in the
account of the taxable service provider after deducting the amount referred to
in sub-paragraph (v), if any, shall not be utilised
in terms of provision under sub-rule (4) of rule 3 of the said rules and shall
lapse on the day such service provider starts availing the exemption under this
notification;

(vii)where
a taxable service provider provides one or more taxable services from one or
more premises, the exemption under this notification shall apply to the
aggregate value of all such taxable services and from all such premises and not
separately for each premises or each services; and

(viii)the aggregate value of taxable services rendered
by a provider of taxable service from one or more premises, does not exceed
rupees *ten lakhs
in the preceding financial year.

3.
For the purposes of determining aggregate value not exceeding ten*lakh
rupees, to avail exemption under this notification, in relation to taxable
service provided by a goods transport agency, the payment received towards the
gross amount charged by such goods transport agency under section 67 for which
the person liable for paying service tax is as specified under subsection (2)
of section 68 of the said Finance Act read with Service Tax Rules, 1994, shall
not be taken into account.

Explanation.-For the purposes of this notification,-

(A) “brand name” or “trade name” means
a brand name or a trade name, whether registered or not, that is to say, a name
or a mark, such as symbol, monogram, logo, label, signature, or invented word
or writing which is used in relation to such specified services for the purpose
of indicating, or so as to indicate a connection in the course of trade between
such specified services and some person using such name or mark with or without
any indication of the identity of that person;

(B) “aggregate value not exceeding *ten lakh rupees
means the sum total of first consecutive payments received during a financial
year towards the gross amount, as prescribed under section 67 of the said
Finance Act, charged by the service provider towards taxable services till the
aggregate amount of such payments is equal to ten lakh
rupees but does not include payments received towards such gross amount which
are exempt from whole of service tax leviable thereon
under section 66 of the said Finance Act under any other notification.

4.
This notification shall come into force on the 1st day of April, 2005.

Services provided to
United Nations or an InternationalOrganizationsare exempt.

[Notification No.
16/2002-ST, dated 2-8-2002]

3.Export of service: Any service which
is taxable under clause 105 of Section 65 may be exported without payment of
service tax.

( Rule 4 of Export of
Services Rules,2005)

4.Exemption to services provided to a developer
of SEZ or a unit of SEZ:

Exempts the taxable
services specified in clause (105) of section 65 of the said Finance Act, which
are provided in relation to the authorized operations in a Special Economic
Zone, and received by a developer or units of a Special Economic Zone, whether
or not the said taxable services are provided inside
the Special Economic Zone, from the whole
of the service tax leviable thereon under section 66
of the said Finance Act subject to certain conditions. (
Refer notification for details)

5.Exemption to value of goods & material
sold by service provider:In exercise of the
powers conferred by section 93 of the Finance Act, 1994 (32 of 1994), the
Central Government, being satisfied that it is necessary in the public interest
so to do, hereby exempts so much of the value of all the taxable services, as
is equal to the value of goods and materials sold by the service provider to
the recipient of service, from the service tax leviable
thereon under section (66) of the said Act, subject to condition that there is
documentary proof specifically indicating the value of the said goods and
materials.

6.Exemption to taxable services provided by TBI
and STEP:All taxable services,
provided by a Technology Business Incubator(TBI) or a Science and Technology
Entrepreneurship Park (STEP) recognized by theNational Science and technologyEntrepreneurship Development Board (NSTEDB) of the Department of Science
and Technology, Govt. of Indiafrom the
whole of the service taxleviable thereon subject tio
certain conditions and procedures. ( Refer notification
for details)

(Notification
No.09/2007 ST dated 01.03.2007)

7.Exemption to taxable services provided by
entrepreneurs located within the premises of TBI or STEP:All taxable services, provided by an
entrepreneur locatedwithin the premises
of a Technology Business Incubator(TBI)
or a Science and Technology Entrepreneurship Park (STEP) recognized by theNational Science and technologyEntrepreneurship Development Board (NSTEDB)
of the Department of Science and Technology, Govt. of Indiafrom the whole of the service taxleviable thereon
subjectto certain conditions and
procedures. ( Refer notification for details)

(Notification
No.10/2007 ST dated 01.03.2007)

8.Exemption to services provided to Foreign
Diplomatic Missions or Consular Post in India:All
services provided by any person, for the official use of a Foreign Diplomatic
Mission or Consular Post in India are exempted from service tax subject to
certain conditions and procedures. (Refer notification for details)

(Notification No.
33/2007-ST dated 23.05.2007)

9.Exemption to services provided for personal
use of a family member of Diplomatic Agent or Career Consular Officers posted
in Foreign Diplomatic Mission/Consular Post in India:All services provided by any person, for personal
use of family member of Diplomatic Agents or Career Consular officers posted ina Foreign
Diplomatic Mission orConsular Post in
India are exempted from service tax subject to certain conditions and
procedures. (Refer notification for details)